# In the matter of Royal Refinery Private Limited, I.A. 1398/2020 in C.P. 2556/I&B/MB/2019

> NCLT judgment dated 2021-01-29. Citation: TCN-2021-NCLT-03187. The case involves an application (I.A. 1398/2020) filed in C.P. 2556/I&B/MB/2019 under Section…

- **Court:** NCLT
- **Order date:** 29 Jan 2021
- **Citation:** TCN-2021-NCLT-03187
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/royal-refinery-private-limited-ia-13982020-in-cp-2556ibmb2019-a2dca7d8

## Summary

### Background

The case involves an application (I.A. 1398/2020) filed in C.P. 2556/I&B/MB/2019 under Section 66 read with Section 26 of the Insolvency & Bankruptcy Code, 2016. The applicant, Mr. Nandkishor Vishnupant Deshpande, sought reliefs related to fraudulent transactions involving Royal Refinery Private Limited (Corporate Debtor) and Shalibhadra Exports Private Limited (Respondent No. 1) and others. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 13.11.2019, based on a Section 9 petition filed by the Operational Creditor. The applicant alleged that the Corporate Debtor engaged in fraudulent transactions with Respondent No. 1, granting them undue preference and defrauding creditors. The applicant also contended that the

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## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Royal Refinery Private Limited on 13.11.2019. Mr. Nandkishor Vishnupant Deshpande was appointed as the Interim Resolution Professional (IRP). The IRP issued a public announcement on 21.11.2019, inviting claims from creditors. The applicant found that Royal Refinery Private Limited maintained three ledger accounts for Shalibhadra Exports Private Limited (Respondent No. 1). The applicant analyzed these accounts for the period 01.04.2018 to 20.05.2019 and found that they related to local sales of gold/gold items. The total outstanding amount from Shalibhadra Exports Private Limited was Rs. 1,21,44,41,476/-. The applicant sent emails and letters to Respondent No. 1 seeking ledger accounts and

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## Issues and analysis

### Issue 1: Whether the transactions between the Corporate Debtor and Respondent No. 1 were fraudulent and …

**Ratio:** Section 66 of the Insolvency and Bankruptcy Code, 2016, addresses fraudulent or wrongful

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**Reasoning:** The court reasoned that the discrepancies in the ledger accounts, the creation of new

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**Interpretation:** The court interpreted Section 66 broadly to include not only insiders but also

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**Application:** The court applied Section 66 to the facts of the case, finding that Respondent

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## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Nandkishor…
- **Respondents:** Royal Refinery…; Shalibhadra…

## Timeline

- **2019-11-13 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) was initiated against Royal Refinery…
- **2019-11-21 — Public Annou…**: Public announcement of CIRP was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66 — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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